9911796707
TMI BlogNON APPOINTMENT OF COMPANY SECRETARY STATUTORILY REQUIREDX X X X Extracts X X X X X X X X Extracts X X X X ..... NON APPOINTMENT OF COMPANY SECRETARY STATUTORILY REQUIRED - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 1-11-2022 - - Company Secretary The expression Company Secretary is defined under section 2(24) of Companies Act, 2013 ( Act for short) as a company secretary as defined in clause ( c ) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (a member of the Institute of Company Secretaries of India) who is appointed by a company to perform the functions of a company secretary under this Act. Company Secretary key managerial personnel Section 203 (1) of the Act provides that every company belonging to such class or classes of companies as may be prescribed shall have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following whole-time key managerial personnel,- managing director, or Chief Executive Officer or manager and in their absence, a whole-time director; company secretary ; and Chief Financial Officer. According to this section the Company Secretary is a key managerial personnel for the company. The following companies are to appoint a Whole Time Company Secretary mandatorily- Every listed company; Every other public company having paid up share capital of Rs.10 crore and more; Every private company having paid up share capital of Rs.10 crore and more. The company which acquires the above said threshold limit for appointment of Whole Time Company Secretary is to appoint Company Secre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary in the first Board meeting after reaching the said threshold limit. Functions of Company Secretary Section 205 of the Act provides the list of functions that are to be performed by the Whole Time Company Secretary which shall include the following functions- to report to the Board about compliance with the provisions of this Act, the rules made there under and other laws applicable to the company; to ensure that the company complies with the applicable secretarial standards; to discharge such other duties as may be prescribed. Generally the following are the functions of the Company Secretary- Conducting the meetings of Board of Directors; Conducting the general meetings of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y; To comply with the provision of Companies Act and other applicable laws to the Company; To maintain statutory records, books of accounts etc. Issues of shares and corporate restructuring; To act as link between the shareholders, the company and the Government Authorities; To adopt Corporate Governance; To file various returns under Companies Act, SEBI Act, taxation laws and other applicable laws to the company etc. Vacation Section 203(4) provides that if the office of Whole Time Company Secretary is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy. Penalty Section 203(5) provides that if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny company makes any default in complying with the provisions of this section, such company shall be liable to a penalty of Rs. 5 lakhs and every director and key managerial personnel of the company who is in default shall be liable to a penalty of Rs.50,000/- and where the default is a continuing one, with a further penalty of Rs.1,000/- for each day after the first during which such default continues but not exceeding Rs. 5 lakhs. Consequences of non appointment If the company, which is required to appoint Whole Time Company Secretary mandatorily fails to appoint the Whole Time Company then the said company is liable to be initiated penal proceedings for such non compliance. In PUTHENPURAKAL PROPERTIES PRIVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TE LTD., VKL HOMES INDIA PRIVATE LTD. VERSUS UNION OF INDIA, REGISTRAR OF COMPANIES - 2021 (3) TMI 308 - KERALA HIGH COURT the petitioners contend that they have part-time Company Secretaries and Auditors to properly look after the affairs of their Companies and for the last so many years, they have been functioning well within the provisions of the Act without giving any room for initiating any penalty proceedings. On these premises, the petitioners contend that they should not be forced to appoint a whole-time Company Secretary and should be permitted to file e-form ACTIVE, INC-22A without insisting on the appointment of a whole-time Company Secretary. The respondents argued that as per the existing rules, the petitioners are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bound to appoint whole-time Company Secretaries, as their paid up capital is more than ₹5 Crores. The petitioners cannot be granted any exemption from the Rules. The High Court held that the petitioner-Companies have not adhered to the provisions of the Companies Act , especially Section 203 thereof. In such circumstances, the respondents are empowered to proceed against the petitioner-Companies, in accordance with law. Adjudication of penalties Rule 3 of Companies (Adjudication of Penalties) Rules, 2014 provides that the Central Government may appoint any of its officers, not below the rank of Registrar, as adjudicating officers for adjudging penalty under the provisions of the Act. Mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nistry of Corporate Affairs vide their Gazette Notification No. A42011/112/2014-Ad.II, dated 24.03.2015 appointed the Registrar of Companies as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 read with Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act. The procedure involved in adjudication is as below- The Adjudicating Officer shall issue a written. to the company, the officer who is in default or any other person to show cause, within such period as may be specified in the notice (not being less than fifteen days and more than thirty days from the date of service thereon), why the penalty should not be imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on it or him. Every notice issued shall clearly indicate the nature of non-compliance or default under the Act alleged to have been committed or made by such company, officer in default. or any other person and also draw attention to the relevant penal provisions of the Act and the maximum penalty which can be imposed on the company, and each of the officers in default, or the other person. The reply to such notice shall be filed in electronic mode only within the period as specified in the notice. The adjudicating officer may, for reasons to be recorded in writing, extend the period referred to above by a further period not exceeding 15 days. if the company or officer in default or any person satisfies the adjudicatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g officer that it or he has sufficient cause for not responding to the notice within the stipulated period or the adjudicating officer has reason to believe that the company or the officer or the person has received a shorter notice and did not have reasonable time to give reply. On receipt of reply from the noticee the Adjudicating Officer considers the same and if such Officer is of the opinion that physical appearance is required, he shall issue a notice, within a period of 10 working days from the date of receipt of reply fixing a date for the appearance of such company, through its authorized representative. or officer of such company, or any other person, whether personally or through his authorized representative: On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date fixed for hearing and after giving a reasonable opportunity of being heard to the person concerned, the adjudicating officer may', subject to reasons to be recorded in writing, pass any order in writing as he thinks fit. The adjudicating officer shall pass an order within 30 days of the expiry of the period of physical hearing. The adjudicating officer shall send a copy of the order passed by him to the concerned company, officer who is in default or any other person or all of them and to the Central Government and a copy of the order shall also be uploaded on the website. While adjudging quantum of penalty, the adjudicating officer shall have due regard to the following factors- size of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny: nature of business carried on by the company; injury to public interest; nature of the default; repetition of the default; the amount of disproportionate gain or unfair advantage, wherever quantifiable, made as a result of the default; and the amount of loss caused to an investor or group of investors or creditors as a result of the default. In no case, the penalty imposed shall be less than the minimum penalty prescribed, if any, under the relevant section of the Act. The Penalty shall be paid through Ministry of Corporate Affairs portal only. All sums realized by way of penalties under the Act shall be credited to the Consolidated Fund of India. The penalty imposed shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid within 90 days from the date of receipt of order. If the said penalty is not paid within the stipulated period the Officer-in-Default shall be punishable with imprisonment which may be extended to 6 months or with fine not less than Rs.25,000/- which may be extended up to Rs.1 lakh or with both. The company shall be liable to penalty of not less than Rs.25,000/- but may be extended to Rs.5 lakhs. Orders of RoC In IN RE : BEAM GLOBAL SPIRITS WINE (INDIA) PRIVATE LIMITED - 2021 (2) TMI 1311 - MINISTRY OF CORPORATE AFFAIRS, OFFICE OF REGISTRAR OF COMPANIES , the Company Secretary of the company, Mr. Anshu Kumar Chakravoarty had resigned from his office w.e.f. 28.02.2019. The company has appointed Ms. Richa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manuja as Company Secretary of the company w.e.f. 27.11.2019 with a delay of 91 days. Therefore the Company along with its Directors have suo-moto filed application vide e-form GNL-1 for adjudication of penalty under the provisions of section 454 of the Act and rules there under. The company prayed that delay in complying with the provisions of section 203 of the Act be condoned or any other relief or reliefs may deem fit be granted. The Adjudicating Officer held that The company and its officers, who have defaulted the provisions of section 203(1) r/w 203(4) of the Act for non- appointment of Whole-Time Company Secretary are liable for penalties under section 203(5) of the Act with effect from 28th August, 2019 to 26th November, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019. The Adjudicating Officer imposed penalty on the Company a penalty of Rs.5,00,000/- and continuing penalty @ Rs.1000/- for 91 days. Similarly the Adjudicating Officer imposed penalty on the Directors of the Companies a penalty of Rs.50,000/- and continuing penalty @ Rs.1000/- for 91 days. In IN RE : ELANCO INDIA PRIVATE LIMITED - 2022 (11) TMI 58 - MINISTRY OF CORPORATE AFFAIRS OFFICE OF THE REGISTRAR OF COMPANIES the company Elanco India Private Limited filed an application for adjudication for violation of provisions of Section 203 of the Act. The Company Secretary of the company resigned on 20.03.2021. The Company appointed another Company Secretary on 20.01.2022 after a delay of 122 days as it could not find a suitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... candidate. The Adjudicating Officer held that the company has violated the provisions of Section 203 of the Act and the rules made there under. The Adjudicating Officer imposed penalty on the company Rs.5,00,000 + continuing penalty @ Rs.1000/- per day for 122 days. The penalty was also imposed on the Directors of the Company Rs.50,000/- and continuing penalty @ Rs.1000/- per days for 122 days. The total penalty comes to Rs.11,38,000/- Appeal Appeal, against the order of Adjudicating Officer, imposing penalty on the company or its Directors or both, may be filed with the Regional Director of that region within a period of 60 days from the date of receipt of the order in Form ADJ setting forth the grounds of appeal accompanyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with the certified copy of the order. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
